U.S. stock futures remained on the back foot on Monday as investors prepared for a potentially market-moving week dominated by Nvidia’s (NASDAQ:NVDA) earnings, escalating tensions between the United States and Iran, and Federal Reserve Chair Kevin Warsh’s upcoming Jackson Hole speech.
The combination of uncertainty around artificial intelligence valuations, volatile energy prices and the outlook for U.S. interest rates kept risk appetite subdued.
Nvidia Earnings Loom Over Technology Stocks
U.S. equity futures moved lower during European trading ahead of Nvidia’s quarterly results on Wednesday.
Nasdaq 100 futures fell 0.6%, while S&P 500 futures declined 0.2%.
Nvidia’s report will provide an important indication of whether the rapid expansion of AI-related spending remains strong enough to support elevated technology-sector valuations.
Investors will pay particular attention to demand from large technology companies, which have committed enormous amounts of capital to data centres and other AI infrastructure. Given Nvidia’s central position in the AI ecosystem, its results could have implications well beyond the company’s own shares.
Higher Server Prices Could Challenge AI Investment Boom
Another issue facing the sector is the increasing cost of AI infrastructure. Bloomberg News reported that rising memory chip prices are pushing up the cost of servers containing Nvidia processors.
Some major Nvidia customers could reportedly see prices rise by more than 15% for systems scheduled to ship early next year, including servers equipped with the next-generation Vera Rubin and Grace Blackwell chips.
Server manufacturers supplying data-centre operators including Microsoft, Alphabet’s Google and Oracle have reportedly warned customers about the increases.
The higher prices raise questions about how long technology companies can maintain the current pace of AI investment without putting additional pressure on profitability.
U.S. Intensifies Economic Pressure on Iran
Investors are also preparing for another escalation in tensions between Washington and Tehran as U.S. Treasury Secretary Scott Bessent gets ready to unveil tougher sanctions against Iran.
Bessent has described the campaign as entering the “endgame” and warned that countries continuing to support Tehran risk becoming “global pariahs.”
Iranian officials have threatened to halt oil exports if Washington continues increasing economic pressure.
For financial markets, the principal risk is the potential impact on energy supplies. Further disruption to Iranian exports or shipping through the Strait of Hormuz could drive crude prices higher, adding to inflationary pressures and potentially complicating monetary policy.
Crude Prices Retreat Following Strong Weekly Advance
Oil moved lower on Monday as traders took profits following two consecutive weeks of gains.
Brent crude futures declined 1.5% to $93.16 a barrel, while U.S. West Texas Intermediate fell 1.6% to $85.70.
Both benchmarks gained more than 5% during the previous week as U.S.-Iran peace negotiations stalled and restrictions on oil shipments through the Strait of Hormuz persisted.
Around one-fifth of global oil supplies normally pass through the waterway, making any prolonged disruption particularly significant for international energy markets.
A sustained increase in crude prices could feed through to transportation and fuel costs, adding to inflation and potentially keeping interest rates elevated for longer.
Jackson Hole Could Provide Fresh Clues on Fed Policy
Federal Reserve Chair Kevin Warsh’s speech at the Jackson Hole economic symposium on Friday will provide another major focal point for investors.
Markets will listen for indications of how the Fed views persistent inflation, economic resilience and the scope for future interest-rate reductions.
A more hawkish message could create additional pressure for highly valued technology and growth stocks, while indications that monetary policy could become more accommodative may provide support for equities.
With Nvidia, Iran and the Federal Reserve all in focus, investors face several potential catalysts capable of driving volatility across stocks, bonds and commodities this week.
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